This article was first published in Harvard Business Review and is available via subscription.
GenAI is expected to be a transformative technology—altering how business is conducted and unlocking enormous value across sectors. Early movers are capturing some of this value. But like previous technological innovations such as the electric motor and personal computer, GenAI is unlikely to be a source of sustained competitive advantage. As more and more companies adopt GenAI, it will level the playing field for first movers’ competitors.
Jay Barney and Martin Reeves examine how companies are using GenAI to reduce costs, improve efficiency, and drive innovation. And they discuss why the advantages they gain are likely to be fleeting as rivals increasingly use GenAI and generate the same or similar results. Value created is not value captured—or at least not for long. The authors assert that the key to building a sustainable competitive advantage is using GenAI to amplify an organization’s unique capabilities and resources.